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Opinion Contributor

SEC rule on corporate political giving too extreme

In a very un-American way, these groups are on a quest to restrict free speech, not promote it. Their focus on “political activities” is but a stalking horse — their broader agenda would chill corporate public-affairs advocacy. The law is not on their side, as they have failed to achieve their policy goals through the Federal Election Commission, the courts and Congress. So they are looking for a strategic assist from the SEC.

But ensuring corporate participation in open debates regarding taxation and regulation is an essential interest of real, as opposed to politicized investors — folks who depend on a reasonable return from their investments to put their kids through college and provide for a comfortable retirement.

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Investors cannot afford to be pawns in this cynical political ploy to further the agenda of special-interest groups. For their part, company executives must realize that they cannot appease these activists with more disclosure, because the activists are not satisfied until companies withdraw from the political debate altogether.

Nonetheless, the SEC staff will argue that it has received an unprecedented number of comment letters in support of this action.

However, it does not mention that 99 percent are form letters ginned up by organizations whose narrow agendas have little to do with advancing the economic performance of companies. Real grass-roots advocates chuckle when they hear that these groups produced over 300,000 letters to the SEC. In the Internet age, small special-interest organizations frequently tap into grass-roots email lists — especially in an election year — to blast out form letters and advance political causes in Washington. With one email and a submit button, poof, you have a synthetic movement.

SEC commissioners must remember their duty to protect investors by resisting special-interest efforts that would negatively affect shareholder value. If the SEC imprudently acts against the interests of real investors in this matter, it will prove itself neither focused on its core mission nor independent. At a time when our nation faces so many serious challenges squarely within the SEC’s core mission, such an outcome would truly be deplorable.

Paul Atkins served as a commissioner of the Securities and Exchange Commission 2002-08 and is CEO of Patomak Global Partners in Washington. Atkins and his firm represent their clients’ interests in U.S. and worldwide financial markets.